We currently hold five first-rate MLPs in our Conservative Portfolio: Enterprise Products Partners (NYSE: EPD), Kinder Morgan Energy Partners (NYSE: KMP), Magellan Midstream Partners (NYSE: MMP), Spectra Energy Partners (NYSE: SEP) and Sunoco Logistics Partners (NYSE: SXL). As we’ve noted in previous articles, all posted solid second-quarter results and are on track for more of the same in the second half of 2009 and beyond.

All focus primarily on natural gas and gas liquids infrastructure, an exceptionally steady business that’s weathered the dramatic ups and downs in the price of the fuel they process, store, transport and market.

This week, we’re adding a fee-fueled energy infrastructure MLP that focuses on oil: Genesis Energy LP (AMEX: GEL), which yields over 9 percent and has raised its distribution for 16 consecutive quarters.

 The partnership’s primary assets are crude oil gathering and pipeline systems located in seven Gulf Coast and southwestern states. The MLP also operates related marketing operations that offset commodity exposure and provide opportunity for expansion.

The oil infrastructure business is somewhat less dynamic than gas, as crude prices generally aren’t as volatile as natural gas prices.

Genesis’ second-quarter numbers are a testament to the sector’s resilience, as well as management’s ability to overcome near-term challenges. The partnership once again hiked its quarterly distribution, which has increased 9.5 percent over the past 12 months. And Genesis generated sufficient cash to more than back up this latest increase.

Cash available for distribution ticked up 4.2 percent from the first quarter, covering the current dividend by 1.5-to-1 margin. Profit margins–as measured by revenues less the cost of sales, operating expenses and administrative costs–were up 3.3 percent from the first quarter, spurred by gains in pipeline transportation, refinery services and supply logistics. This was partly offset by slightly lower margins in the industrial gasses segment.

All four divisions were very profitable amid difficult conditions. Throughput was somewhat lower, owing to less industry activity. And the industrial gasses poster lower results because of ongoing maintenance at one facility. Management expects those repairs to be completed in the third quarter.

Meanwhile, margins in the pipeline transportation segment surged 42.5 percent from 2008 levels, as two carbon-dioxide pipeline asset “drop downs” were completed from parent Denbury Resources (NYSE: DEN). These additions, coupled with strong rates, more than offset the 13 percent drop in throughput that resulted when a key customer curtailed production

And management continues to eye acquisition opportunities that will fuel further dividend growth. Genesis reports a bank loan borrowing base of $419 million and additional credit of $500 million. The environment for issuing debt and equity has also improved immensely.

Investors who take a closer look at Genesis will note that net income in the second quarter declined from year earlier levels. That was mainly due to a drop in operating income, a product of lower throughput. Higher interest expenses associated from earlier asset acquisitions also weighed on net income. Others will note that revenue was down roughly 50 percent from a year ago.

But these numbers matter little for MLPs like Genesis and can mislead investors when it comes to analyzing dividend safety. As with any flow-through entity, the key numbers are the profit margins on operations and, above all, distributable cash flow. And both these figures have remained remarkably stable over the past year that witnessed the demise of more than a few producers.

In sum, there’s little question that Genesis is in excellent financial shape, and that its dividend is both robust and poised for future increases. Buy Genesis Energy LP up to 17.